Why Should Midscale Hotels Enhance Consumer Appeal and Demand
I have explored the evolving preferences of modern guests/travelers, uncovering key trends that will shape the hospitality industry’s future. Whether guests seek a beachside retreat or long-term stays, the future of hotels focuses on personalized experiences and tech-forward journeys, regardless of whether the property is mid-scale or upscale.
Analyzing mid-scale chain hotels from the perspective of owners, investors, and management reveals industry-wide insights, especially for asset-light portfolios. However, strategies that worked 40 years ago may not be as effective in today’s AI-driven, tech-savvy world, where guests either embrace technology or are unfamiliar with it.
For example, Generation X is entering a pivotal phase of wealth transfer. A Wealth-X study estimates that over $80 trillion will be passed from older generations to their heirs, with Generation X poised to receive the first major wave. In North America, those inheriting fortunes from parents with $5 million or more are typically 46 years old.
How should the hospitality sector target this group? Gen X holds values distinct from previous generations, with a stronger focus on technology, environmental consciousness, social justice, and a global outlook.
To appeal to Gen X and other demographics, hotels must offer unique experiences like in-room technology integration, mobile check-ins, wellness-focused dining, family-friendly amenities, and sustainable options. These are the guests who might desire a little bit of everything, taking a ‘have-it-all’ approach.
Are You That Guest Who Wants a Little Bit of Everything?
Kind of hospitality that belongs to everyone because stars that belong to everyone.
If guests who seek a well-rounded experience, for any Mid-scale hotels, blending lower and upper-middle segments, are moving towards experience-based hospitality that appeals to all without sacrificing profitability—even if the location is less than ideal, services are limited, bookings are lower, or staff is insufficient.
Some of the key strategies include such as reducing costs and enhancing sustainability through ESG practices, empowering both guests and staff to embrace tech-AI-driven solutions, balancing digital and analog approaches with strategic management skills, and many more.
Portfolio Reshaping and Performance
Mid-scale hotels, which blend lower and upper-middle market segments, face unique challenges and opportunities when it comes to portfolio reshaping and enhancing performance. These hotels cater to a broad range of guests, offering value-driven experiences that balance affordability with quality. As the hospitality landscape evolves, mid-scale hotels must adopt strategic portfolio reshaping to remain competitive and deliver consistent financial performance. Not every mid-scale hotel is located in a prime destination, which can affect performance.
Portfolio reshaping should focus on improving the geographic diversity of assets to balance risk and take advantage of emerging markets. For example, high-potential regions Southeast and Southwest stand out. Which communities drive quality of life that’s where hotels are set to thrive! No wonder that Las Vegas, Tampa, and Phoenix are leading the charts with RevPAR positive growth according to the STR report.
Portfolio reshaping is vital for mid-scale hotels looking to adapt to changing market demands, optimize performance, and stay competitive. By targeting high-growth segments, diversifying locations, embracing an asset-light model, integrating technology, and focusing on sustainability, mid-scale hotels can create a more flexible and profitable portfolio. Regularly tracking key performance metrics ensures that reshaped portfolios not only meet guest expectations but also deliver long-term financial success.
The Right People at the Right Hotel Every Time
In the mid-scale hotel segment, placing the right people in the right roles is crucial to ensuring portfolio success and optimal performance. As this segment serves a broad range of travelers, including business professionals, families, and budget-conscious tourists, having a strong, well-aligned team is essential. From front-line staff to hotel management, the right personnel can elevate guest experiences, improve operational efficiency, and ultimately enhance financial performance.
Do Brands Still Matter? Or Is It Just for the Loyalty Advantage?
In the competitive landscape of mid-scale hotels, the role of branding has evolved significantly. Traditionally, hotel brands have been a key driver of guest preference, trust, and loyalty, but with the rapid changes in technology, shifting guest expectations, and the rise of independent hotels, the question arises: do brands still matter in the mid-scale segment? Or are they primarily valuable for maintaining customer loyalty through established programs?
While brand loyalty remains an advantage, especially for frequent travelers and corporate clients, mid-scale hotels must re-imagine the role of their brand beyond just loyalty programs to stay competitive. Here’s a closer look at how branding impacts mid-scale hotel portfolios and overall performance.
Guest Assurance: Brands represent a level of trust. Mid-scale travelers, especially families, and business travelers, often prefer brands because they know what to expect. This reduces the perceived risk of booking a hotel in an unfamiliar city or region.
Operational Standards: Branded mid-scale hotels often follow strict operational guidelines, ensuring that the guest experience is consistent across multiple locations. For guests, this creates a sense of reliability, which can drive repeat business.
Marketing and Visibility: A recognizable brand has the power to attract guests through established marketing channels, extensive digital reach, and brand recognition. Well-known mid-scale brands are more likely to appear in search results, be recommended on travel booking platforms and it’s own OBE, and gain media attention, giving them a distinct advantage over independent hotels.
Global Reach and Recognition: Hotel chains have access to larger marketing budgets and established global partnerships, such as affiliations with travel agencies, corporate travel programs, and online travel platforms. This makes it easier for guests to discover the brand and book with confidence.
Franchise Benefits: Many mid-scale hotels operate as franchises, benefiting from brand marketing and corporate support while maintaining a degree of local autonomy. Franchisees can leverage the brand’s global reach and recognition while focusing on delivering localized, high-quality guest experiences.
Centralized Booking Systems: Branded hotels can take advantage of centralized reservation systems, increasing booking visibility and capturing demand that might otherwise go to competitors.
Provide Incentives for Direct Bookings: Many hotel brands incentivize loyalty program members to book directly through their websites or apps, reducing the dependence on third-party booking platforms and increasing profitability.
Increasing Guest Loyalty in a Crowded Market: In the mid-scale segment, competition is fierce. Many independent and boutique hotels are offering experiences that rival branded properties, leading some travelers to prioritize unique stays over brand loyalty.
Focus on Experience-Based Stays: To stay competitive, mid-scale brands should shift toward creating experience-based offerings, integrating wellness programs, eco-friendly initiatives, and community engagement into their stays. This approach can help break away from the “cookie-cutter” reputation of some branded properties.
In the mid-scale hotel segment, brands continue to matter—not just for their established loyalty programs, but for the trust, consistency, and operational support they provide. However, in an increasingly competitive and dynamic market, mid-scale hotel brands cannot rely solely on loyalty programs to drive performance. To remain relevant, they must innovate by offering personalized experiences, adopting modern technology, and blending the advantages of branding with the local flavor and uniqueness that today’s travelers seek.
The balance of loyalty, trust, and fresh guest experiences will determine the success of mid-scale hotel portfolios in the years to come.
To Have and to Hold – Your Ownership
Owning Performance, Not Properties–approach improves the guest experience and operational success. Ownership structures in the hospitality industry have undergone significant changes in recent years, particularly in the mid-scale segment. The asset-lite portfolios have become an increasingly attractive option for hotel brands and investors alike. In this model, hotel brands focus on managing or franchising properties without owning the real estate, thereby reducing the financial burden of property ownership. For mid-scale hotels, the asset-lite model offers unique advantages, including increased flexibility, scalability, and profitability.
However, while this approach can lead to enhance portfolio performance, it requires careful oversight and a strategic mindset to ensure long-term success. This involves examining innovative concepts of asset-light portfolio ownership for mid-sized hotels, how it influences performance, and the essential factors that contribute to success.
Next Steps for Owners/Investors, Developers
As the hospitality landscape continues to evolve, owners, investors, and developers in the mid-scale hotel segment must take a proactive approach to portfolio reshaping and performance enhancement. By optimizing portfolios, investing in technology, embracing sustainability, and refining operational efficiency, stakeholders can build a future-ready portfolio that drives profitability and meets the needs of today’s dynamic travelers. The key to success lies in strategic decision-making, collaborative partnerships, and a long-term vision for sustainable growth in the mid-scale hotel industry.
As the mid-scale hotel segment continues to evolve, owners, investors, and developers must strategically navigate the challenges and opportunities presented by shifting market dynamics, guest expectations, and technological advancements. Whether adopting an asset-lite model, realigning portfolios to adapt to new trends, or investing in technology, stakeholders need to take actionable steps to drive portfolio reshaping and long-term performance.
From high heels to hard hats and everything in between, my journey in the hospitality industry has been an exciting adventure. When presenting hotel concepts and outlining the crucial next steps for owners, investors, and developers in hotel portfolios, it’s all about enhancing performance and staying competitive. But what really makes properties stand out—whether you’re running a family business or managing assets—adding a bit of that special touch brings everything to life and makes your property shine, and sets your operations apart.
Hope this analysis offers insights and recommendations on various key topics, including strategies to elevate the guest experience, revenue enhancement methods, economic impacts, and advancements in booking technology with personalization. Additionally, it provides an overview of the industry, along with other relevant factors for consideration. A detailed analysis deck can be provided.
Why Should Midscale Hotels Enhance Consumer Appeal and Demand
Why Should Midscale Hotels Enhance Consumer Appeal and Demand
I have explored the evolving preferences of modern guests/travelers, uncovering key trends that will shape the hospitality industry’s future. Whether guests seek a beachside retreat or long-term stays, the future of hotels focuses on personalized experiences and tech-forward journeys, regardless of whether the property is mid-scale or upscale.
Analyzing mid-scale chain hotels from the perspective of owners, investors, and management reveals industry-wide insights, especially for asset-light portfolios. However, strategies that worked 40 years ago may not be as effective in today’s AI-driven, tech-savvy world, where guests either embrace technology or are unfamiliar with it.
For example, Generation X is entering a pivotal phase of wealth transfer. A Wealth-X study estimates that over $80 trillion will be passed from older generations to their heirs, with Generation X poised to receive the first major wave. In North America, those inheriting fortunes from parents with $5 million or more are typically 46 years old.
How should the hospitality sector target this group? Gen X holds values distinct from previous generations, with a stronger focus on technology, environmental consciousness, social justice, and a global outlook.
To appeal to Gen X and other demographics, hotels must offer unique experiences like in-room technology integration, mobile check-ins, wellness-focused dining, family-friendly amenities, and sustainable options. These are the guests who might desire a little bit of everything, taking a ‘have-it-all’ approach.
Are You That Guest Who Wants a Little Bit of Everything?
Kind of hospitality that belongs to everyone because stars that belong to everyone.
If guests who seek a well-rounded experience, for any Mid-scale hotels, blending lower and upper-middle segments, are moving towards experience-based hospitality that appeals to all without sacrificing profitability—even if the location is less than ideal, services are limited, bookings are lower, or staff is insufficient.
Some of the key strategies include such as reducing costs and enhancing sustainability through ESG practices, empowering both guests and staff to embrace tech-AI-driven solutions, balancing digital and analog approaches with strategic management skills, and many more.
Portfolio Reshaping and Performance
Mid-scale hotels, which blend lower and upper-middle market segments, face unique challenges and opportunities when it comes to portfolio reshaping and enhancing performance. These hotels cater to a broad range of guests, offering value-driven experiences that balance affordability with quality. As the hospitality landscape evolves, mid-scale hotels must adopt strategic portfolio reshaping to remain competitive and deliver consistent financial performance. Not every mid-scale hotel is located in a prime destination, which can affect performance.
Portfolio reshaping should focus on improving the geographic diversity of assets to balance risk and take advantage of emerging markets. For example, high-potential regions Southeast and Southwest stand out. Which communities drive quality of life that’s where hotels are set to thrive! No wonder that Las Vegas, Tampa, and Phoenix are leading the charts with RevPAR positive growth according to the STR report.
Portfolio reshaping is vital for mid-scale hotels looking to adapt to changing market demands, optimize performance, and stay competitive. By targeting high-growth segments, diversifying locations, embracing an asset-light model, integrating technology, and focusing on sustainability, mid-scale hotels can create a more flexible and profitable portfolio. Regularly tracking key performance metrics ensures that reshaped portfolios not only meet guest expectations but also deliver long-term financial success.
The Right People at the Right Hotel Every Time
In the mid-scale hotel segment, placing the right people in the right roles is crucial to ensuring portfolio success and optimal performance. As this segment serves a broad range of travelers, including business professionals, families, and budget-conscious tourists, having a strong, well-aligned team is essential. From front-line staff to hotel management, the right personnel can elevate guest experiences, improve operational efficiency, and ultimately enhance financial performance.
Do Brands Still Matter? Or Is It Just for the Loyalty Advantage?
In the competitive landscape of mid-scale hotels, the role of branding has evolved significantly. Traditionally, hotel brands have been a key driver of guest preference, trust, and loyalty, but with the rapid changes in technology, shifting guest expectations, and the rise of independent hotels, the question arises: do brands still matter in the mid-scale segment? Or are they primarily valuable for maintaining customer loyalty through established programs?
While brand loyalty remains an advantage, especially for frequent travelers and corporate clients, mid-scale hotels must re-imagine the role of their brand beyond just loyalty programs to stay competitive. Here’s a closer look at how branding impacts mid-scale hotel portfolios and overall performance.
In the mid-scale hotel segment, brands continue to matter—not just for their established loyalty programs, but for the trust, consistency, and operational support they provide. However, in an increasingly competitive and dynamic market, mid-scale hotel brands cannot rely solely on loyalty programs to drive performance. To remain relevant, they must innovate by offering personalized experiences, adopting modern technology, and blending the advantages of branding with the local flavor and uniqueness that today’s travelers seek.
The balance of loyalty, trust, and fresh guest experiences will determine the success of mid-scale hotel portfolios in the years to come.
To Have and to Hold – Your Ownership
Owning Performance, Not Properties–approach improves the guest experience and operational success. Ownership structures in the hospitality industry have undergone significant changes in recent years, particularly in the mid-scale segment. The asset-lite portfolios have become an increasingly attractive option for hotel brands and investors alike. In this model, hotel brands focus on managing or franchising properties without owning the real estate, thereby reducing the financial burden of property ownership. For mid-scale hotels, the asset-lite model offers unique advantages, including increased flexibility, scalability, and profitability.
However, while this approach can lead to enhance portfolio performance, it requires careful oversight and a strategic mindset to ensure long-term success. This involves examining innovative concepts of asset-light portfolio ownership for mid-sized hotels, how it influences performance, and the essential factors that contribute to success.
Next Steps for Owners/Investors, Developers
As the hospitality landscape continues to evolve, owners, investors, and developers in the mid-scale hotel segment must take a proactive approach to portfolio reshaping and performance enhancement. By optimizing portfolios, investing in technology, embracing sustainability, and refining operational efficiency, stakeholders can build a future-ready portfolio that drives profitability and meets the needs of today’s dynamic travelers. The key to success lies in strategic decision-making, collaborative partnerships, and a long-term vision for sustainable growth in the mid-scale hotel industry.
As the mid-scale hotel segment continues to evolve, owners, investors, and developers must strategically navigate the challenges and opportunities presented by shifting market dynamics, guest expectations, and technological advancements. Whether adopting an asset-lite model, realigning portfolios to adapt to new trends, or investing in technology, stakeholders need to take actionable steps to drive portfolio reshaping and long-term performance.
From high heels to hard hats and everything in between, my journey in the hospitality industry has been an exciting adventure. When presenting hotel concepts and outlining the crucial next steps for owners, investors, and developers in hotel portfolios, it’s all about enhancing performance and staying competitive. But what really makes properties stand out—whether you’re running a family business or managing assets—adding a bit of that special touch brings everything to life and makes your property shine, and sets your operations apart.
Hope this analysis offers insights and recommendations on various key topics, including strategies to elevate the guest experience, revenue enhancement methods, economic impacts, and advancements in booking technology with personalization. Additionally, it provides an overview of the industry, along with other relevant factors for consideration. A detailed analysis deck can be provided.
Reprinted from the Hotel Business Review with permission from http://www.hotelexecutive.com/.
Mansi J.
Lead Consultant, Strategist
Compass Hotel Consulting LLC
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